The highest value of total cost was $75,000 in June for Mantilla Beverages Inc.
ID: 2599185 • Letter: T
Question
The highest value of total cost was $75,000 in June for Mantilla Beverages Inc. Its lowest value of total cost was $50,000 in December. The company makes a single product. The production volume in June and December were 13,000 and 8,000 units, respectively. What is the variable cost per unit?
Young Company has provided the following information:
Price per unit $40
Variable cost per unit 12
Fixed costs per month $10,000
Calculate the contribution margin per unit.
$16
Iglesias Inc. completed Job 12 on November 30. The details of Job 12 are given below:
Direct labor cost $840
Direct materials cost $1,100
Machine hours 7
Direct labor hours 22
Predetermined overhead allocation rate $90 per machine hour
What is the total cost of Job 12?
Paramount Moving Company is considering purchasing new equipment costing $700,000. The management has estimated that the equipment will generate cash flows as follows:
Year 1 $200,000
2 200,000
3 250,000
4 250,000
5 150,000
Present value of $1:
6% 7% 8% 9% 10%
1 0.943 0.935 0.926 0.917 0.909
2 0.89 0.873 0.857 0.842 0.826
3 0.84 0.816 0.794 0.772 0.751
4 0.792 0.763 0.735 0.708 0.683
5 0.747 0.713 0.681 0.65 0.621
The company's required rate of return is 8%. Using the factors in the table, calculate the present value of the cash inflows. (Round all calculations to the nearest whole dollar.)
The following is summary of information presented on the financial statements of a company on December 31, 2015.
Account 2015 2014
Net Sales Revenue $600,000 $500,000
Cost of Goods Sold 450,000 400,000
Gross Profit $150,000 $100,000
Selling Expenses 50,000 50,000
Net income before tax $100,000 $50,000
Income tax expense 35,000 18,000
Net Income $65,000 $32,000
What would a horizontal analysis report show with respect to net income?
$9.38 per unitExplanation / Answer
Solution -1
Let variable cost per unit = X, Total Fixed Cost = F
Total cost of June = $75,000, Production Volume = 13000 units
Total Cost of December = $50,000, Production Volume = 8000 units
13000X + F = 75000
8000X + F = 50000
On solving both equations:
X= $5 per unit
F = $10,000
Hence variable cost per unit is $5
Solution -2
Price per unit = $40
Variable cost per unit = $12
Contribution per unit = $40 - $12 = $28 per unit
Solution -3
Direct labor cost = $840
Direct Material Cost = $1,100
Overhead Cost = 90*7 = $630
Total Cost for Job 12 = $840 + $1,100 + $630 = $2,570
Solution -4
Year
Cash Flows
PV factor
Present Value
1
$200,000.00
0.926
$185,200.00
2
$200,000.00
0.857
$171,400.00
3
$250,000.00
0.794
$198,500.00
4
$250,000.00
0.735
$183,750.00
5
$150,000.00
0.681
$102,150.00
Total
$841,000.00
Year
Cash Flows
PV factor
Present Value
1
$200,000.00
0.926
$185,200.00
2
$200,000.00
0.857
$171,400.00
3
$250,000.00
0.794
$198,500.00
4
$250,000.00
0.735
$183,750.00
5
$150,000.00
0.681
$102,150.00
Total
$841,000.00
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